China's economic performance in 2004

2005 Government work report delivered by Premier Wen Jiabao to the National People's Congress

National Bureau of Statistics, People’s Republic of China

Spokesman: Zheng Jingping

(official translation)

In 2004, under the correct leadership of the Central Party Committee and the State Council, all central government departments and local governments consolidated their ideas and conduct solid work in developing and implementing the scientific concept of development strategy. Significant results were achieved in strengthening and improving macroeconomic regulation. Unstable and unhealthy factors in the economic performance were put under control. The national economy kept good momentum of stable and rapid development.

Preliminary estimation indicated that the gross domestic product (GDP) of China in 2004 was 13,651.5 billion yuan, up by 9.5 percent over the previous year without showing big ups and downs. Of this total, the value-added of the primary industry was 2,074.4 billion yuan, up by 6.3 percent; the value-added of the secondary industry was 7,238.7 billion yuan, up by 11.1 percent; and the value-added of the tertiary industry was 4,338.4 billion yuan, up by 8.3 percent.

I. A favorable turn for agriculture production with good harvest of grain

The total output of grain in 2004 was 469.5 million tons, an increase of 38.8 million tons or 9.0 percent over the previous year, reversing the consecutive declining trend since 1999. The average yield of grain crops was 308 kilograms per mu (or 4,620 kilograms per hectare), up 6.6 percent. The total grain production and the average yield of grain crops both broke the historical record. The total cotton production was 6.32 million tons, up 30 percent; the production of oil bearing crops was 30.57 million tons, up 8.8 percent; the production of sugar crops was 95.28 million tons, down by 1.2 percent; the production of meat totaled 72.60 million tons, up 4.7 percent; and the output of aquatic products was 48.55 million tons, up 3.2 percent.

II. Stable and rapid growth of industrial production with continued improvement in enterprise efficiency

In 2004, the total value-added of the industrial sector was 6,281.5 billion yuan, up by 11.5 percent over the previous year. The value-added of industrial enterprises above designated size was up by 16.7 percent, slightly lower than that of the previous year. Among the industrial enterprises above designated size, the value-added of state-owned and state-controlled enterprises rose by 14.2 percent. The growth of heavy industry was 18.2 percent while that of the light industry was 14.7 percent. Analyzed by product, the production of coal and power generation was up by 15.0 percent and 14.9 percent respectively, the production of pig iron, crude steel and rolled steel was up 24.1 percent, 23.2 percent and 23.5 percent respectively, and the production of micro computers, mobile phones and air-conditioners rose between 29.1 percent to 42.6 percent. China produced 5.2 million motor vehicles in 2004, up by 14.0 percent. The sales ratio of industrial enterprises above designated size was 98.1 percent. Industrial enterprises in total made a profit of 1,134.2 billion yuan after compensating for losses by some enterprises, up by 38.1 percent.

III. Slight decline in the growth rate of investment in fixed assets

The investment in fixed assets of the country in 2004 was 7,007.3 billion yuan, up by 25.8 percent over the previous year, a decline of 1.9 percentage points as compared with the growth of previous year. This trend of decline was stable over the year, represented by a 43 percent growth in the first quarter, a 28.6 percent growth for the first 6 months and a growth of 27.7 percent during the first 9 months. Of this total, the investment in urban areas was 5,862.0 billion yuan, up by 27.6 percent, and that in rural areas rose by 17.4 percent.

The structure of investment improved. Investment in the primary industry rose by 20.3 percent in 2004 as compared with a decline of 19.6 percent in 2003, while the investment in the secondary and tertiary industries grew by 38.3 percent and 21.6 percent respectively, a drop of 8 percentage points and 0.5 percentage points. In particular, the investment growth in some fast-growing industries slowed down significantly. Growth of investment dropped by 38.5 percentage points in non-metal mineral products producing industry, 65.5 percentage points in ferrous metal dressing, smelting and pressing industry, and 43.5 percentage points in non-ferrous metal dressing, smelting and pressing industry. On the other hand, investment in agriculture and energy industry was strengthened. Analyzed by region, the investment in eastern areas was up by 26.1 percent; that in central areas and western areas was up by 32.9 percent and 29.3 percent respectively.

IV. Higher increase in market prices

The consumer prices in 2004 were up by 3.9 percent over the previous year, or 2.7 percentage points higher than in 2003, which was mostly caused by the lagging effect of price increase in 2003. Of this total, the consumer price level in urban areas was up by 3.3 percent, and it was up by 4.8 percent in rural areas. Analyzed by category of commodities, the prices for food increased by 9.9 percent, of which prices for grain were up by 26.4 percent, meat, poultry and related products by 17.6 percent, and eggs by 20.2 percent. The retail prices of commodities were up by 2.8 percent, while the purchasing prices for raw materials, fuels and power went up by 11.4 percent, and the producers’ prices for manufactured goods increased by 6.1 percent. The prices for investment in fixed assets were up 5.6, and prices of housing rose by 9.7 percent.

V. Stable and brisk consumer markets

In 2004, the total retail sales of consumer goods reached 5,395.0 billion yuan, up by 13.3 percent over the previous year, or a real growth of 10.2 percent if price factors were deducted. This is one percentage point higher than the growth rate of 2003. Of this total, the retail sales of consumer goods in urban areas were up by 14.7 percent, and the retail sales of consumer goods at and below county level were up by 10.7 percent. In terms of different sectors, the sales of the wholesale and retail industry rose by 12.5 percent, and the sales of the catering industry was up 21.6 percent. Sales of communications products increased by 41.7 percent; household electric and audio-video appliances, 13.7 percent; motor vehicles, 23.4 percent; and oil and related products, 45.9 percent.

VI. Fast development in foreign economic relations and trade

Total value of import and export in 2004 reached 1,154.7 billion US dollars, up 35.7 percent over the previous year. The value of export was 593.4 billion US dollars, up 35.4 percent, and the value of import was 561.4 billion US dollars, up 36.0 percent. As a result, China had a trade surplus of 32 billion US dollars, or 6.5 billion US dollars more than in 2003. The foreign direct investment actually utilized were 60.6 billion US dollars, up 13.3 percent. By the end of 2004, China’s foreign exchange reserves reached 609.9 billion US dollars, or 206.7 billion more than that by the end of the previous year.

VII. Rapid increase in the income of urban and rural households

The per capita disposable income of urban households in 2004 was 9,422 yuan, a real growth of 7.7 percent, while the per capita net income of rural households was 2,936 yuan, a real increase of 6.8 percent, both representing the highest growth since 1997. By the end of the year, the savings deposit of urban and rural households totaled 11,955.5 billion yuan, an increase of 1,592.9 billion as compared at the beginning of the year.

VIII. Improved employment situation in urban areas

Statistics from the Ministry of Labor and Social Security indicated that 9.8 million new jobs were provided to urban residents in 2004, 800,000 more than the expected target. Urban registered unemployment rate was 4.2 percent, or 0.1 percentage point lower than that in 2003.

What has been said above illustrated that the measures for macroeconomic regulation adopted by the central government were prompt, correct and effective. Implementation of these measures helped to prevent local problems from expanding into overall problems, to avoid serious inflation and big ups and downs of the economy, and to ensure the stable and rapid development of the economy.

Looking into 2005, we believe that the overall environment is favorable to the economic development. The national economic development will maintain the good momentum of stable and rapid growth with mild increase of prices, as long as we follow the guiding principle of scientific concept of economic and social development set forth by the central government, implement various measures in strengthening and improving macroeconomic regulation, continuously push forward reform and opening programs, and make efforts in building a harmonious society.